The Accountant of Good Works Ltd. prepared the Payables Ledger Control Account for the period from 1 June 2017 to 30 June 2017. The payables ledger control account disagreed with the balance of the total payable in the ledger.
The balance of the payables ledger control account as at 30 June 2017 was ₦678,950.
The following information was extracted from the source documents of Good Works Ltd:
The subsequent invoices issued by suppliers during June 2017 were omitted from the payables ledger control account:
i. Invoice Number S/06/17/038986 ₦39,000
ii. Invoice Number S/6/17/039167 ₦78,985
iii. Invoice Number S/6/17/039298 ₦95,898
There was an additional error in computing the total balance of credit suppliers as at 30 June 2017. The correct addition was supposed to be ₦468,597 and not ₦568,587.
Kehind is a customer with Good Works Ltd. He is also a supplier of a raw material used by Good Works Ltd in their production line. In June 2017, Kehind sold raw materials to Good Works Ltd, amounting to ₦200,000. In the same month of June 2017, Kehind bought ₦240,000 inventory from Good Works Ltd. The debit balance on Kehind’s account in the payables ledger was included in the sales ledger instead of the purchases ledger.
Sales returns of ₦12,442 were posted to the credit of the purchases ledger instead of Delight’s account in the sales ledger.
Required: Reconcile the payables ledger control account with the amounts obtained from the revised source documents of Good Works Ltd as at 30 June 2017.
See the suggested answer to practice activity 7.10 here.
Suggested answer to practice activity 7.10
Good Works Ltd
Reconciliation of the payables ledger control account with the amounts obtained from the revised source documents as at 30 June 2017
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